Lobbyists look to soften financial overhaul

Banking and business lobbyists prepared a last-ditch effort Friday to scale back proposed new regulations governing the financial industry, hoping to sway congressional leaders who are putting the finishing touches on the legislation.

Only a handful of key differences exist between the bill passed by the Senate on Thursday and an earlier version approved by the House, leaving opponents little time to push for changes.

"The House and the Senate will have one more opportunity to fix this legislation, and we will be engaged," said David Hirschmann, president of the U.S. Chamber of Commerce's Center for Capital Markets Competitiveness.

The center has waged a $3 million campaign against the legislation's proposed consumer financial protection agency. Now the chamber also will lobby for retaining the House bill's broader exemption for nonfinancial businesses, such as airlines, farmers and big manufacturers, from rules governing complex financial instruments known as derivatives.

The bill would require most derivatives to be traded on public exchanges or through clearinghouses.

Auto dealers promise to renew their campaign to win an exemption from the consumer agency's oversight, as the House bill would allow. And large Wall Street banks will continue to fight a provision in the Senate version that would force them to spin off their lucrative derivatives businesses.

But time is running out. A House and Senate conference committee is expected to iron out differences in the two versions of the legislation and have a bill ready for President Barack Obama to sign before Congress breaks for the July 4 holiday.

The significant differences between the bills are few.

"I can't remember ever seeing two major pieces of legislation, really historic pieces of legislation, come out of the two houses so close," House Financial Services Committee Chairman Barney Frank, D-Mass., said after he and Senate Banking Committee Chairman Christopher Dodd, D-Conn., met with Obama at the White House. "It's hard for me to think that this is going to take us more than a month."

Industry lobbyists and consumer groups are preparing a last push to shape the final wording of the legislation. Lobbyists have an added advantage because the legislation is so complicated, and small revisions can have enormous impact.

One fight involves auto dealers, who were largely exempted in the House bill from oversight by the new consumer agency. Facing strong opposition from the Obama administration, they were unable to get a vote on such an exemption in the Senate.

But on Monday, the Senate is expected to approve a motion instructing its members of the conference committee to add the exemption. The motion is nonbinding, but it will add pressure to include the exemption in the final bill.

Auto dealers nationwide will be calling their local senators this weekend pushing for the exemption, said Bailey Wood, a spokesman for the National Automobile Dealers Association.

"We have to convince senators it is better to side with Main Street small businesses that had nothing to do with the financial crisis instead of the White House," Wood said.

On another major issue, large banks such as Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. stand a decent chance of removing the Senate's requirement that they spin off their derivatives businesses.